Innovate on Purpose

Wednesday, July 23, 2008

Idea Management Software Beta Trial

I'm posting this hoping that some of you, faithful readers, might be interested in working with our Incubator software which we will release this week (July 21, 2008) as a beta trial. What that means is that we'll provide the software as a hosted instance and you can try it out and give us comments and feedback. Some of those comments and suggestions may make it into the final version.

If you are interested, please contact me at jphillips at ovoinnovation dot com. Sorry for the jumbled email address but you know the drill online. The beta will be available through at least August 15.

Monday, July 21, 2008

Sponsors are critical to innovation success

The more work I do with customers and innovators, the more evident it becomes - the number one driver for innovation success is a clear sponsor for an idea. Your team can have lots of ideas, many great ideas, a robust system for selection and evaluation, a Stage-Gate process, a significant innovation portfolio, idea campaigns and a culture that sustains innovation. Yet, at the end of the day, any idea that is not sponsored and commercialized is really just pearls before swine.

Let's get down to a few basics - any firm can innovate occasionally, and most can accomplish some forms of incremental innovation. That is, a new idea to extend an existing product or service is accepted and swept into an upcoming product release. What's also clear is that any idea that is not on the product roadmap, or requires much more risk or investment, is much more likely to fall by the wayside in the transition from idea to new product. There is simply too much risk to adopting an idea that your team or organization wasn't requesting and wasn't a part of during the ideation process.

This is one area where open suggestion systems fall apart. Yes, it is easy for many people to submit ideas, and some of them may actually be beneficial. But if no one is willing to adopt and sponsor that idea as part of their new product or service roadmap, few open suggestion ideas will be adopted and commercialized. Open Suggestion models ultimately fall apart because of two big concerns: first, there's little strategic alignment between the ideas and the needs of the business and second, there are few line of business leaders who will adopt the ideas and convert them into commercial products or services.

So, what's needed and what's the "right model"? Well, using our two whipping boys - Google and Apple - we can see that there are several potentially successful models. Apple's model is top down strategic sponsorship - what Steve wants, Steve gets. Few firms can mimic this approach because few have the strategic vision and "guts" it takes to dictate these large bets. But every success (and a few failures) have had Steve's sponsorship and fingerprints. Conversely, Google places hundreds of small bets, and the individual or team that originated the idea must acquire sponsorship from product managers or others to mature the idea. There's no one clear sponsor, instead many different line of business leaders can be a sponsor.

When a firm uses idea campaigns to generate ideas, there's another potential sponsor. The business leader who initiates the campaign should be willing to become the sponsor for any idea that's generated within the idea campaign. After all, he or she was able to define a problem or opportunity that needed to be addressed and was presented with a range of ideas. If the person or team who originates an idea campaign is not willing to adopt or commercialize the ideas, then the process is just an exercise.

We have a concept called "strong sponsorship" or "weak sponsorship". What this means is that an idea may have a sponsor or likely adopter who is seeking more insight and maturity around an idea, and when the idea is "ready" he or she will bring that idea back into their business. Many successful ideas have strong sponsors who are willing to take a risk and implement an idea - often they just need some ownership and visibility to the idea. Conversely, an idea that is offered up but has no clear owner or sponsor will often lag in an idea database. Even very good ideas which don't clearly belong to a group or attract owners or sponsors won't be converted. When this happens, everyone understands the value of the ideas left behind in the idea database and becomes frustrated at the firm's inability to commercialize good ideas.

In the end it will all come down to which ideas gain sponsors, and who is willing to adopt and implement the ideas, converting them into new products and services.

Thursday, July 17, 2008

2nd life becomes real world

In an interesting example of life imitating art, the rock band Rush is planning to release a revised single of their song Working Man. What makes this release interesting is that the song was originally released as part of an album that didn't sell all that well, but the song was picked up by the video game "Rock Band" and the producers requested a slightly different rendition to place in the video game. Over time, the revised version has become so popular among the Rock Band players that Rush is considering releasing the revised version as a single over iTunes. Here's a case where products and services first conceived or derived in the virtual world become available in the "real world".

If you are interested in innovation, you've got to have a toe in the water in the social networking, video game, virtual reality space. There is a significant amount of creativity going on in these arenas. No one knows today where a lot of this work will end up, but I think I can say with all safety that these markets and movements will end up driving a lot of social change and innovation, and will ultimately impact the way we live and interact. For innovators, there's probably no better place, no more fertile ground, than social networking sites and especially virtual reality to try out concepts and ideas.

Yes, I know that most Fortune 500 firms probably have a director of social networking and social media, and are considering how to get involved with virtual reality. Many firms have established store fronts inside Second Life or other virtual reality environments. Yet to many of these firms these efforts are sandboxes. They know they need to be there but can't figure out what they are supposed to do. What I think should happen is that they should round up the people in their firms that understand and interact with virtual reality and use those folks as a focus group. What do they want/need in that space? What could our firm offer? Every firm has employees who are gamers or active in 2nd life or other virtual reality. Why not tap into those folks to gain more insights and start gathering the trends and intelligence that they can provide?

I can't tell you how these environments will ultimately shape our existence or what new products, services or opportunities will emerge, but I can tell you that it will happen. The question is whether you'll be blindsided by the innovation or out in front.

Monday, July 07, 2008

You should outsource innovation if...

I didn't think I'd ever write this post, but I am rapidly coming to the conclusion that some firms are right - they can't innovate. This inability to innovate is not based on a lack of ideas, or a lack of intellectual curiosity, or inadequate skill sets. No, in many cases where firms want to innovate and can't, the barrier is time and focus.

Too many firms have the right people, good ideas and senior management commitment, but simply cannot find the time to innovate. Obviously this suggests a misalignment of the focus and engagement of the teams and the goals of management, but there it is. I've worked in several firms where there is clear commitment from the top - demonstrated in people resources and in dollar resources - but innovation gets shoved aside because people can't be pulled away from their day to day tasks.

So it's time to consider a completely different model - if you can outsource your payroll, outsource manufacturing and other key elements of your business, why not outsource innovation? In this regard I think the firm outsourcing innovation would suggest key areas of focus for a third party outsourcer to consider, and would provide some measure of resource availability for brainstorming and other activities. However, once the ideas are generated, the outsourced firm would run interference on the ideas, evaluate based on agreed criteria, research competitors and present the firm with what it considers the best ideas. An outsourcer could also spend more time looking at trends in an industry and synthesizing what's happening in the industry and key opportunities for innovation in terms of products, services or business models. I guess the question becomes - what's core competency and critical for success of your business, and what can be outsourced or managed by teams that are experts in innovation?

If your team is sold on innovation as an important key criteria for growth and differentiation, how much of the process should you run and manage in house, and how much should you outsource to innovation teams that have the depth, breadth and availability to innovate and are not locked down by your culture and bureaucracy?

The more I work with innovation, the more it becomes clear that some firms can innovate because it is simply part of their DNA, some firms can learn to be innovative, and some firms, while they want to be innovative, will have difficulty finding the time and the focus for innovation, even though they recognize it is important. Maybe the innovation industry should consider a new offering - not just a hosted software application, but a fully managed outsourced process and solution for innovation.

Tuesday, July 01, 2008

Understimulated

I don't know of a good argument for failing to innovate. I suppose there may be one - perhaps a firm has a monopoly on a specific niche and therefore believes that no innovation is necessary. If your firm exists in a competitive space, competes for customers and market share, then innovation is a given. Otherwise your competitors or some new entrant will create a new product, service or business model that is so compelling that you'll be forced to respond, or leave the market.

So, if innovation is important, then we ought to examine what's necessary for good innovation practice. Today I'd like to focus on what I call stimulation - getting people out from behind their desks and interacting with customers, competitive products and services and the wants and needs of the market. Too often, many firms employ armchair quarterbacks - that is, people who want to be innovative but try to do it from their office or cube. These people are understimulated - they don't have a lot of contact with customers or prospects and don't have a good understanding of the market. That's not to say that they can't created a lot of ideas. The ideas these folks generate usually don't solve an important problem or identify a viable new market.

What you'll find is that most good innovators, and innovation firms, have connections to a large array of individuals and other firms, in their own industries and many other industries. Successful innovators are out in the mix, interacting with existing customers and business partners. They are sifting through societal and demographic trends and meeting their potential customers face to face in conferences and focus groups. They are seeing "how it's done" in other geographies or other countries. Here's an example. I was recently asked to speak to an innovation team at a large bank in the US. I asked them how many of them had been in the branch of a competitive bank recently. None had. I asked which firm they considered the most innovative in the banking space. Every answer was about other banks located in the US. I think probably HSBC has been one of the most innovative, yet few bankers in the US have exposure to HSBC. Next, we discussed other firms that might disrupt specific features of the banking industry (funds transfers, high interest rates) that are provided by non-banks such as Paypal and Schwab. Were any of the people in the room actively talking to Paypal or Schwab, to their customers? No.

So in an organization that considers itself fairly innovative, no one was out talking to customers, prospects and potential business partners. Everyone was innovating within their four walls, guessing at what the market wanted or needed, with blinders on about what is actually happening in the market. While a firm can be successful innovating from the "inside out", over time the best innovation happens from the "outside in". Your innovation teams need to get out from behind their desks and get out into the "real world" to understand what people want and need.

OVO is an innovation consulting firm working with Fortune 5000 firms to create repeatable,
sustainable innovation capabilities and disciplines in the "Front End" of Innovation. We provide innovation consulting and innovation training.